Finance Secretary Benjamin Diokno wants the Philippine Offshore Gaming Operators (POGOs) to disappear from the Philippines, which he described as having “social and reputational risks.”
When he went to the Senate this Thursday for the Development Budget Coordination Committee briefing with senaboution to the 2023 budget proposal of the government, Diokno said that POGO could be removed as the income is starting to weaken.
According to the secretary, the income of POGOs reached P3.9 billion in 2021, lower than the P7.2 billion earned in 2020.
“If you ask my personal opinion on this, let’s discontinue with the POGO because of the social cost,” said Diokno.
“It also has a reputational risk because people will ask, ‘Why are they going to the Philippines? Discontinued in China, discontinued in Cambodia, why are they going to the Philippines?'” he added.
According to Diokno, when China and Cambodia stopped the operation of POGO in their countries, they may have moved to the Philippines because they thought the law in the country was too loose or not strict.
Finance Sec. Diokno wants to let POGOs go
In September 2019, the DOF threatened to close POGO due to tax liabilities. It is estimated that P21.62 billion in withholding income taxes are not collected here. As a result, several POGO operators have closed down.
The Finance Department’s forecast in 2020 announced that the government could earn up to P20 billion per year from POGOs. However, only about P6 billion was collected in the industry in 2019.
The Bureau of Internal Revenue (BIR) first explained that “legal issues” are causing problems in collecting franchise tax from POGOs due to the rationale that they are non-resident corporations and are not covered by the such tax.
According to the BIR, in January 2021, they collected P327 million in tax from POGO, which is 68.63 percent lower than what was collected here, which was more than P1 billion in January 2020.
The POGO industry—represented by the Accredited Service Providers Association of PAGCOR (ASPAP)—insisted that their members pay the appropriate regulatory fees and corporate and withholding tax of their staff.